Fast-growing fashion brand gets $120 million investment
An online apparel brand founded by a mother and daughter duo has raised new funding to expand.
Lulus announced it has closed a $120 million investment from later-stage venture capital and growth equity firm IVP, and Canada Pension Plan Investment Board. The company said it took its first outside investment from H.I.G. Growth Partners four years ago, and “they have been valuable partners as we’ve grown the company significantly.”
“As we look to the next phase of our journey, we are excited to work alongside visionaries like IVP and CPPIB to help strategically guide us through this next wave of growth, said Colleen Winter, CEO of Lulus.
Winter co-founded the company with her mother, Debra Cannon, in 1996. It started out as a vintage boutique (in Chico, Calif.) and transitioned to purely online in 2008. After flying under the radar for years, Lulus has been attracting more and more attention, helped by its social media expertise.
The Lulus brand makes up the bulk of its offerings, along with a curated selection of on-trend designers and brands. The price points are affordable and run the gamut from $16 to $300.
The company utilizes a data driven approach to be able to deliver not only what customers want when they want it, but to be able to leverage scarcity and urgency of sale. The strategy has helped Lulus foster a highly-engaged and brand loyal millennial customer base. According to CNBC, the company has been profitable since its first year.
“Since our initial investment in 2014, Lulus has continued to demonstrate spectacular growth, and is now one of the leading digitally native brands in the United States,” said John Kim, a managing director with H.I.G. “We are very proud of the Lulus team as they have only begun to scratch the surface of the company’s potential.”
Macy’s blows past Q1 estimates, raises full-year outlook
Coming out of a strong holiday season, Macy’s reported a stellar performance for its first quarter that easily topped Street estimates.
Macy’s Inc. shares soared 10% in Wednesday premarket trading after the department store retailer reported first-quarter earnings that blew past consensus.
Net income rose to $139 million, or 45 cents per share, in the quarter ended May 5, up from $78 million, or 26 cents per share, in the year-ago period. Adjusted earnings per share came in at 48 cents, better than the 36 cents that analysts had forecast.
Sales rose to $5.54 billion, up from $5.35 billion last year, and besting analysts’ estimates of $5.43 billion. Total same-store sales increased 4.2%, easily beating the 1.4% increase analysts had expected. Same-store sales on an owned basis rose 3.9%.
The retailer said it experienced double-digit growth in its digital business.
“We exceeded our expectations and saw strong performance across all three brands — Macy’s, Bloomingdale’s, and Bluemercury — as well as across all geographic regions and families of business,” said Jeff Gennette, Macy’s chairman and CEO. “We are maintaining a healthy inventory position, which helped us deliver improved gross margin. The winning formula for Macy’s, Inc. is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience.”
In comments, Neil Saunders, managing director of GlobalData Retail, said that Macy’s first quarter sales results suggest that the company’s recovery is gaining momentum.
“After a good holiday season, there was a question as to whether Macy’s could continue to deliver a recovery,” Saunders said. “Today’s results answer in the affirmative, with solid progress on both the top and bottom lines.”
Macy’s said it is ending its joint venture with Fung Retailing Limited in China. Instead, it will remain active on Alibaba’s Tmall platform and social media channels.
Macy’s now expects fiscal 2018 earnings per share of $3.75 to $3.95, excluding the anticipated settlement of charges tied to benefit plans and other charges. This is 20 cents higher than previous guidance and ahead of analysts’ projection of $3.61.
Sales are expected to range from a 1% decline to a 0.5% increase. And same-store sales on an owned-plus-licensed are expected to be up 1% to 2%.
Retail sales post second straight monthly gain
Consumers increased their spending in April, helping retail sales to blossom after a sluggish winter performance.
Retail sales in April increased 0.4% seasonally adjusted over March and 2.8% year-over-year as consumers continued to spend, according to the National Retail Federation said today. (The numbers exclude automobiles, gasoline stations and restaurants.) The April results build on improvement seen in March, which was up 0.3% monthly and 5.2% year over year.
NRF’s numbers are based on data from the U.S. Census Bureau, which said overall April sales – including automobiles, gasoline and restaurants – were up 0.3% seasonally adjusted from March and up 4.7% year-over-year.
“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” said NRF chief economist Jack Kleinhenz said. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”
Specifics from key retail sectors during April include:’
• Online and other non-store sales were up 12.2% year-over-year and up 0.6% over March seasonally adjusted.
• Furniture and home furnishings stores were up 5.8% year-over-year and up 0.8% from March seasonally adjusted.
• Building materials and garden supply stores were up 5.6% year-over-year and up 0.4% from March seasonally adjusted.
• Electronics and appliance stores were up 2.2% year-over-year but down 0.1% from March seasonally adjusted.
• Health and personal care stores were up 0.2% year-over-year but down 0.4% from March seasonally adjusted.
• Grocery and beverage stores were down 0.1% year-over-year but up 0.4% from March.
• Clothing and clothing accessory stores were down 0.4% year-over-year but up 1.4% from March seasonally adjusted.
• General merchandise stores were down 0.8% year-over-year but up 0.3% from March seasonally adjusted.
• Sporting goods stores were down 3.8% year-over-year and down 0.1% from March seasonally adjusted.